President Bush ordered the Treasury Department yesterday to seize more than $1.4 billion in Iraqi government money frozen in U.S. banks since 1990.

The money, plus an additional $600 million frozen by Britain and 10 other countries, will be used to help defray the costs of rebuilding Iraq after Saddam Hussein's regime is toppled, Treasury Secretary John W. Snow said in announcing Bush's order.

Snow said the United States has also asked other countries to freeze Iraqi assets so they can be used to help with the rebuilding. And he said Treasury has launched "a worldwide hunt" for an estimated $6 billion the United States believes Hussein, his family and aides obtained through kickbacks and illegal oil sales and have stashed in concealed accounts. This money would also be used for humanitarian aid in a post-Hussein Iraq.

Countries that don't cooperate could be "cut off from the U.S. financial system" under provisions of the U.S.A. Patriot Act, which Congress passed in response to the terrorist attacks on the World Trade Center and the Pentagon, a senior Treasury official said after Snow left the briefing with reporters.

"We call upon all nations to join us and to step forward to fulfill their obligations for the benefit of the Iraqi people," Snow said.

The $1.4 billion in principle and interest that will be confiscated from 17 U.S. banks will be transferred to an account in the New York Federal Reserve Bank, Treasury officials said. The money is in frozen accounts of the Iraqi government and of four entities controlled by Iraq: the Central Bank of Iraq, Rafidain Bank, Rasheed Bank and the State Organization for Marketing Oil.

There is a total of about $1.7 billion in the accounts, Treasury officials said. But about $300 million has claims on it by victims of terrorism who have won judgments against Iraq. That money will not be seized under the order, they said.

Treasury officials said that even though many countries oppose military action against Iraq, they believe most nations would support an effort to seize Iraqi funds and channel them into rebuilding the country.

One senior official said that France and Switzerland were among countries that have not frozen Iraqi funds, but the official said it is possible they had no funds to freeze. Officials at the French and Swiss embassies could not be reached last night.

A congressional report from last year estimates that Hussein and those close to him have obtained more than $6 billion through trades and sales banned by U.N. sanctions imposed over the past 12 years. The money has been hidden in front companies, the senior Treasury official said.

"Some of that money was plainly used to purchase the very goods and arms which has now brought us to war," the official said. "It's important to find that cash to use for aid. We don't want it to be diverted to underwrite terror."

Barring a country or its financial institutions from the U.S. system would entail cutting off corresponding bank accounts with U.S. banks. Foreign banks use such accounts to deposit money and do business here.

The United States could impose the less severe punishment of publicly naming any country that doesn't cooperate. That tactic has worked well in trying to get Ukraine to be more aggressive in barring money laundering, the senior Treasury official said.

The banks holding frozen assets are Citigroup, Bank of America, Bank One, Wachovia, American Express, J.P. Morgan Chase, Bank of New York, Commercial Bank of Kuwait, Arab Banking Corp., Societe General, National Bank of Egypt, Deutsche Bank, UBS, HSBC, Banca Nazionale del Lavoro, Gulf International Bank and the Federal Reserve Bank of New York.

The United States has also started a "worldwide hunt" for $6 billion that it believes Saddam Hussein, his family and his aides have hidden, says Treasury Secretary John W. Snow.